SEVERANCE AGREEMENT AND RELEASE OF ALL CLAIMS
Exhibit
10 (a)
AND
RELEASE OF ALL CLAIMS
This
Severance Agreement and Release of All Claims (“Agreement”) is made and entered
into by and between Xxxxx X. Xxxxxxxx, Executive Vice President of Sonoma
National Bank (referred to herein as the “Bank”) and Chief Financial Officer
(referred to herein as “Officer”) of Northern Empire Bancshares, a California
Corporation (referred to herein as the “Company”) and the Company and the
Bank.
RECITALS
WHEREAS,
Officer’s employment with the Company and the Bank shall cease by mutual
agreement of the parties, effective September 29, 2006 (the “Separation
Date”);
WHEREAS,
Officer does not have pending against the Company or any of its affiliated,
related, parent or subsidiary corporations (including, without limitation,
the
Bank) or any of its or their directors, officers, employees, shareholders or
agents (collectively referred to herein as the “Released Parties”) and the
Company does not have pending against Officer any claim, charge or action in
or
with any federal, state or local court or administrative agency;
and
WHEREAS,
Officer understands that Officer may have at least 21 days from the Separation
Date in which to consider the Agreement, and that after executing the Agreement,
Officer has an additional 7 days after signing to revoke the Agreement. Officer
further understands that this Agreement shall not become effective or
enforceable until the revocation period has expired.
WHEREAS,
Officer and the Company and the Bank desire to settle fully and finally all
existing and/or potential differences between them;
NOW,
THEREFORE, in consideration of the mutual covenants and promises herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
it is agreed by and between the parties as follows:
AGREEMENT
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1.
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Severance
Sum.
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a. As
consideration supporting this Agreement, the Company agrees to pay Officer
the
gross sum of Two Hundred Forty Thousand Dollars (“Severance Sum”), which Officer
otherwise would not be entitled to receive. The Severance Sum will be paid
in
one lump sum payment. The Severance Sum shall be subject to all applicable
withholdings and deductions required by federal and state law. Payment of the
Severance Sum shall be made within 5 calendar days after the 7-day revocation
period has expired.
b. Officer
agrees that payment of the Severance Sum and the accelerated vesting of stock
options under Paragraph 19 below shall constitute the entire amount of economic
consideration provided to Officer under this Agreement and that Officer will
not
seek any further compensation for any claimed damage, costs or attorneys’ fees
in connection with the matters encompassed in this Agreement.
c. Conditional
Nature of Severance Payment.
Officer’s right to payment of the Severance Sum set forth in 1(a) above (to the
extent Officer is otherwise entitled to such payment) and right to accelerated
vesting under Paragraph 19 below, shall be conditioned upon the return of all
Company and Bank property by September 29, 2006, and upon Officer not directly
or indirectly engaging in (whether as an officer, consultant, agent, proprietor,
principal, partner, stockholder, corporate officer, director or otherwise),
any
of the following: (1) the disclosure of any Company or Bank trade secrets,
including but not limited to, any formula, pattern, compilation, program,
device, method, technique, or process of the Company or Bank that is not
generally known to the public to any person, and particularly not to any firm,
corporation or business that competes with Company or Bank or is a customer
of
the Company or Bank (2) divulging any confidential information of the Company
or
Bank to any person or any such entity; (3) any act or conduct that would have
the intended or reasonably foreseeable effect of wrongfully interfering with
or
disrupting any contractual or economic relationship(s) that the Company or
Bank
has with any other person or entity.
Officer
agrees that breach of any of the above conditions shall constitute a material
violation and breach of this Agreement.
2. Non-admission.
This
agreement and compliance with this Agreement shall not be construed as an
admission by either party of any liability whatsoever, or as an admission by
any
Released Party of any violation of the rights of Officer or any person, or
a
violation of any order, law, statute, duty or contract.
3. Professional
References.
Any
verbal or written request(s) for professional references regarding Officer
shall
be directed to the Human Resources Department of the Company, and only the
following information will be provided by the Company: (1) Officer’ employment
dates, (2) title, and (3) salary. Officer hereby authorizes the Company to
provide such information upon request.
4. Non-disparagement.
Officer
shall not disparage any of the Released Parties, or any representative, customer
or supplier of the Company or the Bank, or any affiliate of the Company or
the
Bank. Similarly, the Bank and Company agree that its officers and directors
will
not disparage Officer. Notwithstanding the foregoing, any party may respond
accurately and fully to any question, inquiry or request for information when
required by legal process.
5. Confidentiality.
Officer
understands and agrees that this Agreement and each of its terms, and the
negotiations surrounding it, are confidential and shall not be disclosed by
Officer to any entity or person, for any reason, at any time, without prior
written consent of the Company, unless required by law. Notwithstanding the
foregoing, Officer may disclose the terms of this Agreement to Officer’s spouse,
and for legitimate business reasons, to legal, financial, and tax advisors,
who
shall also be bound to maintain the confidentiality of this Agreement and its
terms.
6. Confidential
Information.
Officer
shall not, for the benefit of any person or entity other than the Company or
the
Bank, disclose or use any information regarding the Company’s or the Bank’s
business, officers, employees or customers, which was produced by any officer
of
the Company or the Bank in the course of employment with the Company or the
Bank
or otherwise produced or acquired by or on behalf of the Company or the Bank,
and which is not properly in the public domain.
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7.
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Releases.
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a. In
exchange for the benefits described in Paragraph 1, Officer and Officer’s
successors and assigns, release and absolutely discharge the Released Parties
of
and from any and all claims, demands, actions and causes of action, which
Officer now has, or at any other time had, or shall or may have against any
of
the Released Parties, whether now known or unknown, including, but not limited
to, any and all claims for breach of contract; breach of the implied covenant
of
good faith and fair dealing; inducement of breach; interference with contract
or
prospective economic advantage; wrongful or unlawful demotion; violation of
public policy; invasion of privacy; intentional or negligent infliction of
emotional distress; intentional or negligent misrepresentation; conspiracy;
failure to pay wages, commissions, bonuses, benefits, vacation pay, severance
pay, attorneys' fees, or any other compensation of any sort; defamation;
discrimination or harassment on the basis of race, color, sex, sexual
orientation, religion, national origin, ancestry, age, disability, medical
condition or any other protected class or status; any claim under Title VII
of
the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e et. seq., the Age
Discrimination in Employment Act of 1967, as amended; the California Fair
Employment and Housing Act, as amended; violation of the Occupational Safety
and
Health Act, or any other health/safety laws, statutes or regulations; violation
of the Employee Retirement Income Security Act of 1974; violation of the
Internal Revenue Code; violation of the federal Americans with Disabilities
Act;
violation of the federal Family and Medical Leave Act or California’s Family
Rights Act; violation of Department of Labor regulations; violation of
California’s Labor Code or Business and Professions Code; violation of any other
applicable state, federal or local law; or any other alleged wrongful conduct
by
the Released Parties, including any claim related in any way to Officer’s
employment or termination of employment with the Company or the Bank;
provided,
however,
that the
release contained herein shall not be construed in any way to release the
Company or the Bank from any obligation to indemnify Officer pursuant to
agreement or applicable law, including, but not limited to, any obligation
regarding the advancement of costs.
b. In
addition, Officer expressly waives the provisions of Section 1542 of the Civil
Code of the State of California, which provides:
A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his favor at the time of executing the release, which if known by
him
must have materially affected his settlement with the debtor.
c. The
Officer understands and agrees that Officer:
i. Has
had
at least a full twenty-one (21) days within which to consider this Agreement
before executing it, or if Officer has executed this Agreement within less
than
twenty-one (21) days of the date of delivery to Officer, Officer acknowledges
that such decision was entirely voluntary and that Officer had the opportunity
to consider this Agreement for the entire twenty-one (21)-day period.
ii. Has
carefully read and fully understands all of the provisions of this Agreement.
iii. Is,
through this Agreement, releasing the Released Parties from any and all claims
Officer may have against the Released Parties.
iv. Knowingly
and voluntarily agrees to all of the terms set forth in this
Agreement.
v. Knowingly
and voluntarily intends to be legally bound by the same.
vi. Was
advised and hereby is advised in writing to consider the terms of this Agreement
and consult with an attorney of Officer’s choice prior to executing this
Agreement.
vii. Has
a
full seven (7) days following the execution of this Agreement to revoke this
Agreement and has been and hereby is advised in writing that this Agreement
shall not become effective or enforceable until the revocation period has
expired.
viii. Understands
that any rights or claims under the Age Discrimination in Employment Act of
1967
(29 U.S.C. § 621, et seq.) that may arise after the date this Agreement is
executed are not waived.
d. The
Bank
and the Company hereby release and absolutely discharge Officer of and from
any
and all claims, demands, actions and causes of action, which the Bank or Company
now has, or at any other time had against Officer, whether now known or unknown,
that arise out of or are related to events, acts, conduct or omissions occurring
prior to its signing this Agreement, including, but not limited to, all claims
related to Officer’s employment with the Bank or Company or the termination of
that employment; provided
however, that
this
release shall not extend to: any claims that may arise after this Agreement
is
executed, including (without limitation) any claims for breach of this
Agreement; and any claims arising at any time out of Officer’s obligations to
protect the Company’s or the Bank’s proprietary or confidential information
pursuant to agreement or applicable law.
8. Acknowledgments
and Representations.
Officer
acknowledges and represents that he has not suffered any discrimination or
harassment by any of the Released Parties on account of his race, gender,
national origin, religion, marital status, age, or any disability, medical
condition or other characteristic protected by law. Officer acknowledges and
represents that he has not been denied any leave to which he may have been
entitled by law, and that he has not suffered any job-related wrongs or injuries
for which he might still be entitled to compensation or relief. He further
acknowledges and represents that, except as expressly provided in this
Agreement, he has been paid all wages, bonuses, compensation, benefits and
other
amounts that any of the Released Parties has ever owed to him. He represents
and
warrants that all of the factual representations he makes herein, all of which
induce the Company to enter into this Agreement, are true in all material
respects.
9. No
Voluntary Assistance.
Officer
agrees that Officer will not in any manner encourage or willingly assist any
person, including any past, present, or prospective employees or applicants
for
employment with the Company or the Bank, in filing or pursuing any lawsuit,
claim or action against any of the Released Parties, in any state or federal
court or before any state, federal, or governmental agency, except as Officer
may be required by statutorily authorized process to give testimony or to
provide documents at a legal proceeding, or to cooperate in any agency or legal
proceeding as authorized by law.
9. Assignment.
Officer
agrees that Officer will not assign, sell, transfer, delegate, or otherwise
dispose of, whether voluntarily or involuntarily, or by operation of law, any
rights or obligations under this Agreement. Any such purported assignment,
transfer, or delegation shall be null and void. Officer represents that Officer
has not previously assigned or transferred any claims or rights released by
Officer pursuant to this Agreement. Subject to the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective heirs, successors, attorneys, and permitted assigns. This Agreement
shall also inure to the benefit of any Released Party. This Agreement shall
not
benefit any other person or entity as except as specifically enumerated in
this
Agreement.
10. Integration.
This
Agreement, including Exhibits A, B and C, sets forth the entire agreement
between the parties hereto and fully supersedes any and all prior or
contemporaneous agreements or understandings, written or oral, between the
parties hereto pertaining to the subject matter hereof.
11. Modification.
This
Agreement may be modified, restated or otherwise changed only by a writing
signed by Officer and the President of the Company. No oral representations
or
other acts shall give rise to an implied modification of this
Agreement.
12. Choice
of Law.
The
validity, performance and all other matters pertaining to this Agreement shall
be governed by the laws of the State of California, without regard to the
conflict of laws rules of said state.
13. Waiver.
The
failure or delay of any party to enforce at any time any of the provisions
hereof shall not be construed to be a waiver of the right of such party
thereafter to enforce any such provision. No waiver shall be valid unless in
writing and signed by the party providing such waiver.
14. Severability.
If any
provision of this Agreement or the application thereof to any situation or
circumstance shall be invalid or unenforceable, the remainder of this Agreement
or the application of such covenant, agreement, term or provision to situations
or circumstances other than those as to which it is invalid or unenforceable
shall not be affected; and each covenant, agreement, term or provision of this
Agreement shall be valid and enforceable to the fullest extend permitted by
applicable law. In such event, the parties shall negotiate in good faith to
substitute for any such invalid or unenforceable provision a valid and
enforceable provision which most nearly effects the parties’ original intent in
entering into this Agreement.
15. Consultation
of Counsel.
Each of
the parties acknowledges that they have had the full opportunity to seek
independent legal advice in respect to the contents of this Agreement and that
they sign this Agreement voluntarily after having been offered such
opportunity.
16. Notice.
Any
notice required or desired to be given under this Agreement shall be deemed
given if in writing sent by registered mail to Officer’s last known residence or
to the Company’s principal office, to the attention of the President of the
Company, as the case may be.
17. Arbitration.
The
parties agree that any dispute, controversy, or claim arising out of or relating
to this Agreement shall be resolved by binding arbitration in accordance with
the Rules of the American Arbitration Association (the “AAA”) governing
employment dispute resolution, which shall apply except as modified below.
Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction. There shall be a single arbitrator agreed upon mutually
by
the parties; but if they cannot agree upon the selection within forty-five
(45)
days after demand for arbitration is given by one party to the other, an
arbitrator having reasonable experience in employment dispute resolution matters
shall be selected in accordance with the applicable rules of the AAA. The
arbitration shall be conducted in Sonoma County, California, or at the AAA
facility closest to Sonoma County, unless otherwise mutually agreed by the
parties. Each party shall pay its own attorneys’ fees and costs, except that the
Company shall pay the fees and expenses related to the arbitration that the
Officer would not generally be required to bear if Officer brought the same
action in a court otherwise having jurisdiction. The arbitrator shall prepare
a
written decision and shall have the power to grant damages, remedies or relief
that would be available in a court otherwise having jurisdiction of the matter,
but no other damages, remedies or relief. Subject to the foregoing, the
arbitrator shall have the power to determine if any issue is arbitrable under
this Agreement. BY
SIGNING BELOW, EACH PARTY ACKNOWLEDGES THAT THE ARBITRATION PROVISION OF THIS
AGREEMENT REQUIRES THE PARTY TO GIVE UP RIGHT TO HAVE THE DISPUTE LITIGATED
IN A
COURT AND/OR THE RIGHT TO A JURY TRIAL.
Nothing
in this Agreement is intended to prevent either Officer or the Company or the
Bank from obtaining injunctive relief in court to prevent irreparable harm
pending the conclusion of any such arbitration.
18. Voluntary
Agreement.
Officer
has fully reviewed the terms of this Agreement, acknowledges that Officer
understands the terms of this Agreement, and states that Officer is entering
into this Agreement knowingly, voluntarily and in full settlement of any and
all
claims that Officer may have as a result of Officer’s employment with Company or
the Bank.
19. Vesting
of Stock Options.
Upon
the effective date of this Agreement, following all periods within which Officer
may revoke this Agreement, all stock options held by Officer shall become fully
vested and exercisable by the Officer, subject to (a) compliance with the
Company’s Trading Policy (a copy of which is attached as Exhibit A), including
applicable ‘blackout periods’; (b) securities laws and regulations applicable to
Officer as an ‘affiliate’ of the Company; and (c) the Company’s 1997 Stock
Option Plan (a copy of which is attached as Exhibit B) and Officer’s Stock
Option Agreement(s) (a copy of which is attached as Exhibit C), including any
applicable exercise periods. It is further understood and agreed that the
Company is not providing any representations or assurances as to any tax
treatment with respect to the exercise of any of Officer’s stock options or the
sale of any shares received upon exercise. Officer acknowledges that he has
the
opportunity to seek the advice of his own tax advisor with respect to the tax
effects and/or treatment of any exercise of his stock options and/or sale of
stock received upon exercise.
20. Counterparts.
This
Agreement may be signed in counterparts, each of which shall be an
original.
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Dated:
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September
26,
2006
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/s/ Xxxxx X. Xxxxxxxx | |||
| Xxxxx X. Xxxxxxxx | |||||
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Dated:
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September
29
,2006
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SONOMA NATIONAL BANK and NORTHERN EMPIRE BANCSHARES | |||
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By:
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/s/
Xxxxxxx Xxxxxxx
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| Xxxxxxx Xxxxxxx | |||||
| President and Chief Executive Officer | |||||
